Tip #1 Improve Your Relationship with Money
The purpose of money may seem utilitarian as a prime medium of exchange for goods and services. But our relationship with money goes beyond the personal. We use money to spend on experiences, create memories and also share with others. It meets our basic needs like food, shelter and also grants us financial freedom to pursue options and gives us autonomy to make decisions.
But inadvertently in the trappings of life, we let the inverse happen. Instead of controlling money, it controls us and shackles our freedom. Review your relationship with money by asking how it aligns to your values and goals. Like any relationship, respect needs to go both ways.
Tip #2 Create Goals that Matter
As anyone can attest, part of making any relationship work is to have goals and a clear singular destination in mind. This is where having goals come in. Draw up a clear timeline of your short, mid and long-term goals and vividly outline them.
Make it as quantifiable as possible and also make it personal. Ask yourself why it matters to you and how it improves your quality of life. If it’s a goal that is also interlinked to what you are passionate about, chances are you would be more committed towards achieving it.
Tip#3 Budget & Automate your Finances
Having no sense of control is often why we end up feeling stressed or uneasy about money matters. Create a monthly budget to stay on track of what your income and expenses are so that you are firmly in the driver’s seat steering your finances. Technology can be a helping hand with plenty of apps at your disposal for you keep tabs on where your money is going.
Where possible, look to automate as much as possible through direct debits or auto-transfers so you don’t miss a payment. This way, you can avoid worrying about the small stuff and focus your attention on parts of your budget that needs more TLC.
Tip#4 Volatility You Can Live With
If you are investing today and have endless anxieties or trouble sleeping at night worrying about your portfolio, then you are likely taking too much risk. Set aside some time to pore through your investments to look for ways to de-risk your portfolio. If necessary, book an appointment with a licensed wealth professional to help you.
Volatility is part and parcel of investing and investors need to learn how to be comfortable with it. It’s all about tailoring a portfolio comprised of diversified investments that suits your needs and risk profile.
Tip#5 Reach Out
We all talk about our day with our family and close friends. Sometimes it can get pretty personal as we divulge our innermost feelings. But, the conversations rarely center on money. There’s nothing worse than feeling alone with the weight of the word seemingly upon you.
Confide in a close friend or family and share about your financial issues. Abandon any feeling of embarrassment or guilt that you might have and normalize conversations about money. You might be able to get a different perspective and find new ways to solve your financial quandary.
Tip#6 Tackle your Debts
Having debts is not necessarily bad. But it’s only when you lose control and let it spiral into a never ending credit cycle that it becomes a problem. Deal with your debts head on and be strategic in your debt repayment by targeting the loans that have the highest interest rates especially credit card bills.
Time is of the essence when settling your loans. So make sure you pay them on time as it could incur late charges or even affect your credit score. If you’re stuck, again don’t be afraid to reach out for a helping hand. The Credit Counselling and Debt Management Agency (AKPK) offers a free debt counselling and management program.
Tip#7 Buffer for Emergencies and Room for Error
One of the biggest lessons the pandemic has taught us is the importance of preparing for emergencies. The future is inherently uncertain and the best way to prepare is to really just be prepared. Work towards building an emergency fund comprised of at least 6 months’ worth of living expenses that can tide you over.
In any financial plan, it’s also important to give allowance for mistakes or some room for the figures to run slightly above or below estimates. To succeed financially, sometimes it’s just about making sure that you get more rights than wrongs.
Tip#8 Learn and Empower Yourself
As alluded, money mistakes are bound to happen. But you shouldn’t get hung up about them and what has already happened in the past. Forgive yourself and learn from your mistakes to transform it into a teachable moment. Even if it’s something as frivolous as an impulsive online purchase or an ill-informed investment decision.
Self-care is not just about daily wellness maintenance but also making sure that you improve your station and live your best life. Practice mindfulness and self-awareness to make good decisions about money so that you can reap its full reward.